CVC-Cosmen consortium pulls out of bid for National Express; Stagecoach bids £1.7 billion

Striking a severe blow to UK's National Express Group Plc, the consortium comprising CVC Capital Partners and Spain's Cosmen family withdrew from their bid for the beleaguered transporter, apparently due to its concerns over refinancing of the company's debt, along with other issues.

National Express opened its books last month to the consortium following its sweetened £765 million offer, or around £1.7 billion including the Group's debt. (See:CVC-Cosmen consortium sweetens National Express offer)

Although the consortium declined to give the reason behind the pull out, it is believed, but it was concerned about refinancing of the £977 million debt burden of the ailing transporter including a £490 million loan which matures next September, as well as differences over the National Express's US bus operations. The consortium said that fundraising for the deal was not a problem.

The news of collapse of the deal surprised the stock market, and caused the shares of National Express slump 23 per cent to 362 pence, down 109 pence Friday on the London Stock Exchange, registering the biggest fall in eight years.

National Express said in a statement: ''The Group has a strong portfolio of businesses and continues to perform resiliently despite challenging trading conditions.''

''The board believes that National Express has a strong future as an independent listed company, offering a compelling investment case building on the strength of its individual businesses.''